Bowman Consulting Group Ltd.

2020, that was the last full year prior to our IPO was 103 million. This is an exciting time for us as we continue to advance toward our frequently discussed goal of reaching $500 million in gross revenue annual run rate within our first five years as a public company. The continuing strength of our markets across all divisions and services resulted in healthy -over-year growth of net service billings and adjusted EBITDA during the quarter. Interest rates came down for the first time in nearly five years, which reenergized the building infrastructure market. And as we hoped would be the case, several large transportation awards that we have been waiting on finally got underway late in the quarter. In July, we affected a change in leadership within operations. We promoted Dan Swayze to the role of chief operating officer and he hit the ground running. We expected Mike Brillen to settle into the newly independent position of president, engaging him in oversight of non -to-day operations and strategy of the company. Once in the role, however, Mike decided it was not what he wanted and he elected to retire from Bowman after nearly 30 years with the company. In the interest of both clarity of leadership and timely reassignment of responsibilities, Mike resigned from both his leadership and governance roles immediately upon announcing his retirement. For now, we do not intend to refill or reassign the position of president. The job of leading -to-day operations is now squarely in Dan's hands and I'm extremely pleased. He's been right there alongside Bruce and me during the past couple of months as we've implemented staffing adjustments to better align labor and revenue. These efforts have already started paying dividends as evidenced by the third quarter results. At the same time, we redoubled our commitment to bottom up forecasting. I'm confident we will remain diligent about proper alignment of labor, accurately forecasting revenue and continual improvement of performance. Our markets remain healthy and sales and new work continues to outpace revenue. Year over year, our backlog grew 27%. Since the end of Q2, backlog increased by $28 million of which approximately one-third was attributable to backlog acquired during the quarter with a balance coming from robust bookings of new work which resulted in a book to burn ratio that was well above one. Okay, with that, I'm going to turn the call over to Bruce to discuss the financial results.

Bruce? Terrific. Thanks, Gary. Well, it certainly was an all hands on deck effort during the quarter to refocus and realign our operations to deliver the solid results we released last night. As a quick reminder to everyone, we refer to net service billing and net revenue interchangeably. Net revenue is an industry standard non-GAAP metric that represents the revenue generated by our workforce by eliminating pass through project expenses from gross revenue. So I'll start with revenue on slide four. Gross revenue in the third quarter was up 21% year over year at $113.9 million with net revenue up 23% to $101 million. Year to date, we've generated $313 million of gross revenue and $281 million of net revenue which represents year over year increases of 24% and 26% respectively. During the quarter, we implemented targeted staffing adjustments throughout the company to better align our labor with current and forecast revenue. Our gross margin for the quarter without giving effect to any of these labor adjustments was .4% as compared to .6% in the third quarter last year. Year to date gross margins has been .9% as compared to 51% this time last year. On a sequential basis as compared to Q2 this year, SG&A was down 140 basis points as a percent of while this is not a destination, it is meaningful progress in our efforts to leverage economies of scale as we grow. On slide five, you'll see that non-cash stock compensation in the quarter was $6.5 million compared to $7.2 million last year. Year to date non-cash stock compensation expenses is $20.4 million which includes roughly $1.4 million of expense related to our employee stock purchase plan. We're still projecting roughly $26 million in total stock compensation expense for 2024 which would be 6 to 7% of net revenue. Looking ahead, we expect that percentage to drop to around 5% in 2025 and settle in around the 3 to 4% range thereafter. Adjusted EBITDA for the quarter increased $1.9 million from last year to just under $17 million or a .7% margin on net revenue. Adjusted EBITDA this quarter included roughly $1.6 million of one-time costs related to the restructuring of labor during the quarter. We believe labor adjustments are now behind us. For the nine months ended September 30th, adjusted EBITDA increased $6.7 million over last year to $42.5 million which was a .1% margin on net revenue. We still believe we can achieve a revenue increase. To calculate organic growth, however, we remain consistent in our methodology of considering revenue from acquired companies to be part of the organic base of revenue after four quarters. As detailed in the press release in slide six, 49% of gross revenue for the quarter was from building infrastructure, 19% from transportation, 18 from power and utilities, and 14 from emerging markets which includes imaging and mapping, water resources, mining, and environmental services. As compared to last year, building infrastructure is down 550 basis points as a percentage of gross revenue or nearly 10% with emerging markets increasing nearly 800 or more than doubling. This is in large part due to the acquisition of SIRDEX but it's also from other gains in water and environmental services. The distribution of net revenue by vertical was roughly the same. During the third quarter, gross revenue from acquired companies was $23.3 million and net revenue was $20.4 million or roughly 20% of gross and net revenue. This quarter, acquisition revenue included Excellence, Dennis, CFA, Blankenship, High Mesa, Hess Roundtree, TCE, Moore, Spieth Lewis, SIRDEX, Element, Roe Ballot, and FCS. At year end, acquisitions we made in Q4 of 2023, meaning Excellence through Hess Roundtree, will fall off the acquired revenue list. Turning to slide seven, on a trailing four quarter basis, organic growth of net revenue at the end of the third quarter was approximately .3% as compared to total net revenue for the trailing four quarters at the end of the third quarter last year, during which all net revenue was included in the organic basis. Organic growth of net revenue during that period was most significant in emerging markets at 63% with transportation next at 17% followed by power utilities at 14% and building infrastructure at 1%. Nominally, transportation was the largest contributor followed by power and utilities, emerging markets, and building infrastructure. This trailing four quarters view of organic growth is a little different than we've presented in the past. Given the volatility created by the inconsistent timing and frequency of acquisitions between quarters, we feel this presentation of trailing four quarter growth offers a better perspective for understanding growth trends. For the nine months ended September 30, gross revenue from acquired companies was 49.8 million and net revenue was 45.1 million, or roughly 16% of both gross and net revenue. Organic growth of net revenue for the nine months was approximately .6% as compared to the same nine month period last year, where all that revenue was likewise considered organic. Again, the largest percentage growth was emerging markets at 48% followed by transportation at 14%, power and utilities at 6.2%, and building infrastructure at just under 1%. Again, transportation contributed the largest nominal growth. We believe that organic growth from building infrastructure will continue to rebound into 2025, while growth from emerging markets will moderate a little bit now that the starting basis is higher. Turning to slide eight, our balance sheet is as healthy as it's been with roughly 12 million of cash on hand, low leverage, and plenty of capital available. Our line of credit is close to $70 million available, and our equipment financing capacity is sufficient to cover capex through 2025. Net debt on September 30 was roughly 85 million, which represents a leverage ratio of 1.6 times trailing four quarters adjusted EBITDA, and approximately 1.2 times forward four quarters of adjusted EBITDA. Cash flow from operations for the nine months was up $5.5 million sequentially from June 30 at 11 million, with $44 million -to-date cash flow from operations before a $33 million use of cash from changes in work and capital. With respect to cash and liquidity, interestingly, in October we found ourselves unexpectedly back in the position of having the opportunity to file our 2023 returns in accordance with the R&D position we'd adopted for our 22 returns. As it turned out, definitive guidance the IRS was expected to have released prior to October had not been issued as we approached filing our returns. This allowed our tax advisors and us at Pricewaterhouse to reach a reasonable basis position for continued R&D expense deductibility, enabled us to file without remitting the approximately $12 million payment we expected to make and without accruing for penalties. So that $12 million will stay with us for now, and since the filing was deemed to be a reportable subsequent event, you will see further disclosure about the return of the UTP in the 10Q. During the quarter, we used our capital to buy back just about 500,000 shares of common stock under our $25 million authorization at an average price of approximately $23.89 per share. This does not include shares of treasury stock purchase to cover taxes associated with stock vesting. On September 30, we had 17.7 million shares outstanding. We've continued to repurchase shares under the authorization since the end of the quarter, and as of today, we have approximately 17.5 million shares outstanding. You'll see on slide nine that at the end of the quarter, we had gross backlog of $380 million, which is $81 million more than the end of Q3 2023, and as Gary said, over $28 million more than June 30th. Well, approximately $10 million of the sequential increase over last quarter was a result of backlog. The balance was derived from new orders. The distribution of backlog is slightly over weighted to transportation relative to revenue in the third quarter. Given the nature of our sales cycle and the generally longer term nature of transportation projects, I would not read much into that mismatch. Turning to slide 10, in the release yesterday, we increased our 2024 net revenue outlook to accommodate the revenue we'll pick up from the recent Exel Tech acquisition and reaffirmed adjusted EBITDA, which would not have breached the rounding threshold if we added it. We also introduced a new net revenue outlook for 2025 of $422 to $437 million, which represents organic growth of net revenue between 5 and 9 percent based on pro forma full year 2024 net revenue adjusted for partial year acquisitions as the basis. For our outlook for 2025 adjusted EBITDA, we're projecting a 16 to 17 percent margin on net revenue, which means a range of $68 to $75 million. As always, that excludes future acquisitions not closed as of today. As evidenced by the more than 30 percent reduction to our equity value in response to last quarter's roughly 4 percent reduction to revenue guidance and roughly 8 percent reduction to adjusted EBITDA guidance, the message is clear that there's no benefit to stretching with respect to 2025 guidance at this time. As such, we will revisit our outlook in connection with our quarterly and year-end reports throughout 2025. We're hopeful that this quarter demonstrates to the market that Bowman is not damaged and our equity is meaningfully undervalued at current multiples as compared to our peers and other comparable transactions we see in the marketplace for firms our size. Before I go, I'll quickly mention that I'll be at the Bayer Conference in Chicago next week, the end of next year. Check our investor website to see a calendar of where we'll be presenting and meeting investors in person.

Gary? Okay, thank you, Bruce. Last week, we announced the acquisition of Washington State-based ExelTech Consulting. It's a well-established -year-old engineering design and program management firm. They have extensive bridge design, structural engineering, transportation planning, and environmental sciences capabilities. Geographically, this acquisition complements our July acquisition of Washington-based FCS Group, which is a professional services firm focused on rate and financial consulting for the utility and renewable energy industries. The acquisition of ExelTech fits right into our strategic objectives by fueling the growth of our national transportation practice and expanding the breadth of associated offerings. The fact that ExelTech and FCS are in close proximity to each other is providing Bowman with an immediate combination of regional expertise, established customer relationships, and expansion of our operational footprint to the Pacific Northwest and beyond. From a macro perspective, the first Fed rate cut in several years has energized real estate markets. However, uncertainty around the pace of future rate cuts and the landscape of regulatory and sort of paralyzing effect on this market. Good news for us is that planning and engineering are the first steps in preparing for project starts and restarts. And we see a notable uptick in market activity in real estate-related markets, particularly in multifamily markets such as bill for rent and apartments. Okay, turning to slide 11. Several of the transportation award starts that were delayed over the first part of the year finally got underway in the latter part of the quarter. Notable among these is the Illinois DOTI-55 corridor rehabilitation project where we're providing multi-year management and design services for a 16-mile section of the highway. Others include a design-build project for the Virginia DOT and a comprehensive roadway improvement project for US Route 1 in Philadelphia. Large third quarter transportation wins now making their way through contracting include a $10 million award with Cook County, Illinois, and furthermore we fully expect activity relating to the Allegheny Tunnel Bypass project for Pennsylvania Turnpike Authority to increase through the end of the year. In our developing ports and harbors practice, which we now group with transportation, we were awarded several million dollars in contracts to be delivered in 2025 from both long-standing and new customers. Our new Port Asset Conditions Kit is an innovative proprietary delivery platform that we've developed for marine facility operators. We've got high hopes for its prospects moving forward. Coastal and resiliency engineering combined with high altitude aerial surveying has enhanced our ability to pursue public and private sector customers in the aftermath of ever more frequent and ferocious natural disasters. Another aspect of our ports and harbors expansion includes enhanced waterfront capabilities which have been leveraged by our additional development practice leaders to pursue urban waterfront redevelopment and coastal shore protection opportunities in areas including Kentucky, South Carolina, and Maine. Also, we're expanding our focus to inland recreational marinas and boating facilities in areas such as Pittsburgh, Charleston, Savannah, Philadelphia, Houston, and others. On other fronts, we recently contracted to immediately start work at the Charlotte Douglas International Airport in North Carolina. The scope of this work includes comprehensive survey services for a new 10,000 foot runway. Additionally, we rewarded our fifth ongoing on-call agreement with Southwest Gas, expanding our service area into western and northern Nevada and California. Revenue in our MEP group is trending upwards with strength in commissioning services and in the power markets we're seeing an uptick in electrification and decarbonization assessments as the industry moves more toward net zero and all electric solutions. Acquisitions continue to have a positive long and short-term impact on the organic growth of the business. A notable example is our growing fire protection engineering practice which came from the Fisher acquisition. Our contract for surveying hazardous material storage facilities for Marine Corps bases in the U.S. and Japan was recently expanded by an additional 21 sites. Over the course of our nearly 30 years in business, organic growth has always been a central focus of our approach to growth and expansion. Our long-term track record of a robust organic growth is a result of culture, attitude, risk tolerance, and an eye for good markets. These attributes can characterize us still today. Our recent inclusion as an ENR top 150 global design firm puts us in good company among the industry elites and works to solidify our brand as a premier provider of comprehensive engineering and design solutions. Going into 2025, I expect that we'll continue to be acquisitive, likely with larger average revenue size and a bit less frequent than we've been over the past several years. We'll continue to focus on adjacent businesses and attractive markets that we can readily integrate and grow significantly over time. While private equity continues to play an ever more active role in the industry paying outsize multiples for larger firms, we're confident that our culture and approach will continue to make us competitive and successful in our M&A activities. Our strategy is working. Clearly, we stumbled last quarter in terms of forecasting, but we've recovered our firm footing and are poised to deliver on our commitments during the remainder of the year and into 2025. Our efforts toward diversification, integration, leadership transition, and process excellence have positioned us to grow organically, expand our services, make acquisitions that broaden our footprint while deepening our customer relationships and wallet share, and most importantly, deliver long-term profitability, cash flow conversion, and value creation for our shareholders. With that, I'll now turn the call back to the operator for questions and answers.

We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your touchtone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your headset before asking your question. We will pause here briefly to allow questions to generate in queue. The first question comes from the line of Jeff Martin with ROP Capital Partners. Please proceed.

Thanks. Good morning, Gary and Bruce. I hope you're doing well. I'm glad to see the efforts put into the quarter starting to show through. So I guess first question, are we done with the internal changes? Are we heading into the fourth quarter with a clean slate? If not, what remains to be done?

Clean slate, yes. It's always a journey, but over the third quarter, the changes we've made, we consider that we reached our destination there. We're ever diligent and deliberate and keeping an eye on that. So it's something that always evolves, but done deal.

Good to hear that. Okay. And then with respect to your updated 2025 guidance, what level of organic growth are you assuming for that year? And if you're assuming any different equation in that organic growth relative to what you had previously assumed, maybe help detail that for us.

Jeff pointed out that's probably around 7% organic growth for next year. Again, coming out as a sheer conservative on that, it's basically looking at this year as adjusted for acquisitions at the base, growing forward. I don't know if there's any significant shifts in strategy related to next year other than continuing focus on these markets that we're in.

Great. And then the last one for me, you mentioned moving up the size of M&A deals going forward. Could you help maybe give us some relative perspective on how much you plan to move up? And then I guess the second part to that question would be curious to get an update on how the CERD-X acquisition is performing since that is one of your largest acquisitions to date.

Right. So it's an evolution in our M&A strategy. Really, it's a recognition as we're getting larger and larger. It takes the larger deals to move the needle. So we don't have any real, we don't have a target size, but just as strategy. The larger and the larger they get, by definition, almost a little less frequent. As far as CERD-X, we're pleased so far. We're seeing lots of selling and revenue synergy and it's moving along

fine. Jeff, we've averaged sub 10 this year in our acquisitions and sort of setting a goal to get that into double digits next year. You think about the number of acquisitions and we talk about that in terms of revenue. Revenue bonds. CERD-X was an outlier in that. So putting that aside, I think doing things more in the, let's call it exel tech, which is closer to the tens as opposed to the smaller ones, the elements and species that were earlier in the year and try to cut a couple turns in terms of number of acquisitions out, but still continue to increase the amount of revenue bought.

Very

helpful. Thank you.

Thank you. The next question comes from the line of Aaron Spachella with Craig Hallam. Please proceed.

Yeah. Good morning, Gary and Bruce. Thanks for taking the questions. Morning. So maybe first on transportation, you know, good to see some of those awards come in there. You know, I know that's been a big focus for you. Can you just talk about how that pipeline looks there, you know, continuing to expand to more DOTs and, you know, starting to see that, that IIJA funding come out here in the after the year?

We are seeing the pipeline continuing to expand and several of our acquisitions, like we mentioned on the call, exel tech. So it's a big focus, focus of our inorganic growth strategy, but the acquisition several years ago of McMahon and our Chicago operations, they're seeing some good, robust and large transportation projects.

Gary, you'll see we're focused on DOTs. Certainly that's kind of like, let's call that a depth, but there's also a breadth and breadth being things like the adding bridge engineering, you know, bridge design and that sort of structural element of transportation engineering to try to expand how many things we can do for a ever growing base of clients. We've already started, we mentioned, we've already started working with exel tech in advance of the acquisition and they're already, you know, teaming with them on projects that, you know, where their skill set brings additional capabilities and opportunities to groups that are better entrenched with larger transportation departments than they would have been nationally, but with an additional scope of services.

We're in early innings with Surdex, but Surdex was not able to serve big transportation markets prior to joining us and now with our broad clientele, we're looking into actively marketing state DOTs for aerial survey work that Surdex brings. And it's

one of those that it kind of has a bit of momentum. It's an acceleration. You get one, two, three, five, 20 DOTs. Now the next 10 of them are easier to get than, you know, the first, the first 10 to 20.

No, that's really helpful, Coler. Thanks. And then just second for me, you know, can you just maybe some early reads or thoughts just on, you know, the election and what that mean for your business here moving forward?

Certainly we're speaking of early innings, we're in barely up to the plate on assessing that. We think if anything, it'll be positive for our business. We have a presence in fossil fuels and oil and gas. We think the change in the regulatory environment will make that a more robust market. We're looking forward to that. We fully anticipate that the infrastructure spending is, the die is cast on that. So we're quite confident that we won't see any adverse effect on that. Some analysts feel that the new administration may move to some more privatization of infrastructure. So we're already thinking how we focus on marketing to our PPP developer clients. And in the mining, the lack of the change in the regulatory environment probably increased mining. We're cautiously optimistic on the renewables. There's a lot of thought that the renewables, the IRA has created so much economic activity in red states that it hopefully will stay in effect. If a different party, the other party had won the election, we'd probably be more apt to double down on our renewables. But we were fully confident that our presence in renewables will be a robust part of what we do.

All right. Thanks for taking the questions. I'll turn it over. Thank

you,

Erin.

Thank you. The next question comes from the line of Andy J. Whitman with Baird. Please proceed.

Hi. Good morning and thank you for taking my questions. I guess I just wanted to ask a little bit more about the early look here at 2025. And specifically, if you looked at your backlog today, how does it compare to like historical levels in terms of the amount of that 2025 work that you're guiding to that's covered? Is it more? Is it less? And can you also just comment about the level of permitting and notices to receive that you've received on this work? Just as comes out of last quarter where some of those delays were some of the reasons for the shortfalls. I just wanted to get your confidence that the permitting and the things that are needed to get to work are in place for this 25 outlook.

So, Andy, I would say that the backlog is relatively characteristically similar, maybe a little bit more beneficially stacked for next year, only because of some of these timing issues we've had in the last couple of quarters and a half or so. There's a little bit of more ready to go kind of stuff that might hit a little quicker. But I'd say generally speaking, the backlog is similar in nature. It's bigger, obviously, than it's been. But relative to what we forecast for next year, I think it's characteristically aligned in terms of permitting. We don't anticipate any real hurdles with that.

Okay, that's helpful. Just maybe a couple of clarifications here then. It looks like the one-time cost associated with the staffing adjustments, it looks like there's in the other line for your Justinieva-Dubridge is more than a little bit than it has been historically. Is it in there and added back, Bruce?

Yeah.

Okay. And then, I'm sorry, just in your script, the comments on the changes related to the calculation of organic growth, excuse me. Can you just go through that one more time? Just so I can make sure I understood what you're doing

now. For the quarter, for looking at third quarter, we looked at a trailing four-quarter organic growth rate using the same methodology we've used in terms of anything that is more than four quarters prior was in the organic base from which we were growing. Anything that was acquired in the last four quarters is eliminated from the total net revenue used to calculate the growth on top of that. In terms of the year to date, it's the same as it's been.

Sorry. So, you're saying that the 8% organic NSR growth that you highlighted in your release is based on a four-quarter result that's reported for this quarter? Did I understand that correctly? Trailing four quarters.

Trailing four quarters from third quarter. So, it would be fourth through third and then a third, fourth, so 422 to third 23 versus fourth 23 to third 24. With everything from prior year being reassigned

to organic. Got it. Okay, let me, I'm going to try this maybe a couple different ways. What if, what would the calculation have been under the old methodology for the third quarter?

So, the third quarter in discreetly would have been about flat because there was, because of the timing of acquisitions in the previous year. Okay. Singular Q over singular Q was more flat.

Yeah, okay. Yeah, that's what I was trying to understand. Okay, that makes more sense. Okay, so then just in terms of the M&A pace, I'm just, I'm kind of curious. Did the organizational changes in the quarter at all impact the deal flow that you're able to execute, or were they kind of mutually exclusive actions for the company during the quarter?

The organizational changes didn't adversely affect our ability to do deals and M&A pace of deals. I'll call it our machine is still in place.

Got it. Okay. I think that's all my questions for today. Thanks. Thank

you. The next question comes from the line of Britt Dillman with D8 Davison and Company. Please proceed.

Hi, great. Thanks. A question around the margin expansion applied in 2025. What are the levers you're going to be able to pull to support that? Just thinking about that in context to what we've seen in 2024 as far as it is a beneficial contract mix. Is it the margin expansion implied in 2025? I mean, what are the levers you're going to be able to pull to support that?

So we think that we are, again, continuing to improve our economies of scale. We think that we're growing the top line. We're starting to be able to better meter the overhead costs associated with the revenue. Like some of the, I don't know that I would say it's built into the contract rates. We certainly are seeing some improvement in, I think, some of the multipliers that we think we can be getting on some of these projects marginally. That's all it takes is marginal improvement.

A continued focus on operational excellence. That's a lever that's always to be pushed. It's one that, renewed focus on that.

When we look at this quarter, we're in the range of that.

Right. So the expectation is, especially with some of the things you've been doing here internally in the last three, three, more than that month, that you should be able to outgrow your SG&A.

Yeah, we think we can squeeze a little bit more out of labor. The relationship with labor, labor multiple of revenue, multiple labor and SG&A. Again, I think this quarter we're in the range of where we want to be for the whole year, next year.

Right. Okay. Then I guess just on building infrastructure, maybe just sort of the residential exposure, state of affairs, some companies talking about sort of slower trends as of weight. I know you're not really directly tied to the starts per se, but is that area of your business stable for you? It sounds like maybe you're anticipating it to reaccelerate based on conversations you're having. Just be curious if you could talk around that.

Yes, it's stable and not to, not to, not to, not to quote what you just said, but we are based on conversations, based on level of activity, on proposal activity. We do see new energy being injected into that going into 2025.

Thanks, Brent. Thanks, Brent.

Thank you. The next question comes from the line of Alex Riegel with B Riley. Please proceed.

Good morning, gentlemen. A couple quick questions here. First, stock-based comp decline, stock, hey Gary, first stock-based comp declining as a percentage of revenue. Is this a change in compensation strategy? Is it a swap into more cash comp? Can you talk about that comment a little bit more?

I think it's a combination of a couple things. Yes, it is metering of the utilization of stock as compensation, you know, looking ahead. There is the burn-off of old grants that, you know, that burned off now of, from pre-IPO days. It has to do with the, yes, there may be some, some shift towards more cash-based compensation. I don't know that it is an increase in overall compensation, but a shifting of paradigm there a bit and just growing into, you know, the level of of having revenue grow at a pay, you know, such that it absorbs from a percentage basis more of that stock comp.

That is helpful. And then two questions as it relates to some of your end markets. First, any update on the data center market and in particular these really large AI data centers? And then secondly, if you can provide any comments on whether or not you're seeing multifamily opportunities re-accelerate?

On the data centers, the activity is robust. We're continuing to grow our presence in that market. We're, right now, it's outside of the almost, you know, we just, civil engineering and for the site engineering. We are looking at opportunities, looking into next year, some opportunities to get inside the building with the mechanical and electrical facilities. On the residential, on the multifamily, yes, we are, we are seeing some significant movement in multifamily. Like say it's, as far as proposals, level of interest from the market. So we're, we have a high degree of optimism that we'll see some acceleration in the multifamily activity next year.

Yeah, Alex, the data center market constraint today is the power, not the land. And so, you know, a lot of ways things are bleeding across a couple of different sectors for us. So I think there is activity we see in the capacity of power to provide for what is an ever increasing demand for the physical data center locations. He's certainly reading about how, you know, folks are starting very preliminarily to look at SMRs as power sources for data centers. So we're, it's coming at us from two different directions.

And one thing

that we're

seeing, hearing from, in the data center market, is the AI data centers, they're not so, I think it's right, extensive to the latency. So there's a lot more flexibility to where AI data centers can be located as far as proximity to the fiber corridors. So that just, that opens up more opportunities for us with our geographic dispersion to do data center work in areas that we weren't doing it before. We do get a lot of inquiries,

I'm told, about from landowners, you know, thinking about re-zonings or, you know, reuse applications to change over, you know, hey, can I be a data center? Everybody now has got a couple acres wants to be a data center.

Very helpful. Thank you very much. Thanks Alex.

Thank you. Again, to ask a question, please press star one. We will pause here briefly to allow questions to generate. There are no additional questions left at this time. I will hand it back to Gary for close remarks.

Thank you, Tia. Just I'll close by thanking everybody for participating this morning. Thank you to those who are part of the bowman for all the hard work done, all the good work over this quarter, certainly to our investors and stockholders. Thank you for the faith you put into us. And we're quite pleased with Q3 and quite pleased with our progress and continuing to evolve this company and reach our growth goals. That will wrap it up for the morning. Thank you everyone.

Thank you. That concludes today's conference call. Thank you. You may now disconnect your line.